JUDGMENT

GOSWAMI, J. :— This judgment will govern both the appeals.

2. These two appeals by special leave are directed against the common judgment of the Gujarat High Court in Sales Tax Reference No. 5 of 1969 relating to two periods, namely, (1) from 24th October, 1955 to 31stMarch, 1956 and (2) from 1st April, 1956 to 31st March, 1957.

3. The Tribunal had earlier delivered a common judgment in two revision applications No. 121 and No. 122 of 1961 and made a composite reference to the High Court under the Bombay Sales Tax Act stating the following question for answer :-

"Whether on the facts and in the circumstances of the case the three contracts for construction of coaches on the under-frames supplied by the Railway Administration, the contracts containing similar terms were contracts for sale of goods and not works contracts?"

4. The facts appearing from the statement of case are as follows :-

The respondent, M/s. Variety Body Builders, Baroda, entered into three contracts with the Western Railway Administration for construction of railway coaches on the under-frames supplied by the said Railway Administration. The three contracts were reduced into writing and contained the terms and conditions under which the contracts were to be performed. The first agreement dated September 17, 1954 was for construction of 25 N. G. coaches. The second agreement dated July 11, 1955 was in respect of construction of 6 T.L.R. coaches. The third agreement dated January 14, 1956, was for construction of 25 N. G. coaches. The Sales Tax Officer held that the transactions relating to the construction of the said coaches were transactions of sales of these coaches by the respondent. On that basis the respondent was assessed at Rs. 2,72,803/8/- for the first period and at Rs. 3,82,820/- for the second period. The respondents appeals to the Assistant Commissioner of Sales Tax were unsuccessful. The revision applications of the respondent before the Deputy Commissioner of Sales Tax and later before the Tribunal met with the same fate. The Tribunal , however, referred the question of law as set out earlier to the High Court and the High Court answered the same in favour of the respondent and hence these appeals by special leave.

5. The only question with which we are concerned in these appeals is whether the contracts entered into by the respondent with the Railway Administration for construction of railway coaches are contracts for sale of goods or works contracts.

6. Since the three contracts are substantially similar the High Court and the authorities below took note of the recitals of the third contract dated January 14, 1956, and we well also take the same into consideration.

7. Mr. S. T. Desai appearing on behalf of the appellant and Mr. Ram Phal appearing on behalf of the respondent took us through all the clauses of the agreement and pressed their rival viewpoints. Mr. Desai submits that from the totality of the conditions laid down in the agreement the contract is one for sale, being transfer of property in the railway bogies as a unit of goods and, therefore , the transaction is liable to sales tax, Mr. Ram Phal, on the other hand, relying on the same terms and conditions in the contract, submits that it is a pure and simple works contract and not a contract for sale of goods.

8. It is well settled that when there is a written contract it will be necessary for the Court to find out therefrom the intention of the parties executing the particular contract. That intention has to be primarily gathered from the terms and conditions which are agreed upon by the parties. We will, therefore, immediately turn our attention to the agreement in question.

9. The preamble of the agreement shows that it is an agreement entered into between the Railway Administration and the respondent described as "the contractor."

10. The first clause describes the "nature of work." It states "the contractor hereby agrees to undertake the building of 25 Narrow Gauge Third Class B